Tags: Schiff | Fed | QE3 | stealthily

Peter Schiff: Fed Already Has Implemented QE3

Friday, 02 Mar 2012 06:22 AM

By Dan Weil

Federal Reserve Board Chairman Ben Bernanke told Congress this week that the central bank will ease policy further if necessary. But Peter Schiff, president of Euro Pacific Capital, says it already has done so – stealthily.

"If you actually look at what the Fed is doing, they're doing QE3 (quantitative easing) whether they state it or not," he tells Yahoo.

So why won’t the Fed fess up to what its actions? “If it admits that it's printing all this money, then the dollar is going to fall even faster, oil prices are going to rise faster,” Schiff says.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

“The Fed wants to create inflation. It just doesn't want to be forthright about it.”

Bernanke wonders why unemployment, 8.3 percent in January, remains so high, Schiff says. “I’d suggest that the reason why it’s so high is because of his monetary policy. He’s keeping interest rates too low.”

The Fed actually needs to raise rates, Schiff says.

"The very short-term consequences would be horrific for an economy addicted to cheap money,” he says. But, "We're going to have to swallow some bitter-tasting medicine in the form of higher interest rates if you're going to clear out the mess.”

Schiff isn’t the only one who thinks the Fed should have reversed its policy already. But recall that central bank officials themselves made comments in that direction at least as early as 2010, and the economy proved it wasn’t ready.

So the timing is a tough call.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

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